Quiz week 5 - 200116 Management Accounting FundamentalsTopic 5: Cost -Volume-Profit analysis- PDF

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200116 Management Accounting Fundamentals
Topic 5: Cost -Volume-Profit analysis- Alternative Formats
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A cement manufacturer has supplied the following data: Tons of cement produced and sold 680,000 Sales revenue $ 2,788,000 Variable manufacturing expense $ 1,156,000 Fixed manufacturing expense $ 760,000 Variable selling and administrative expense $ 272,000 Fixed selling and administrative expense $ 294,000 Net operating income $ 306,000 What is the company's unit contribution margin? (Round your intermediate calculations to 2 decimal places.) $4.10 per unit $2.00 per unit $0.45 per unit $2.10 per unit Total variable expense = 1156000 + 272000 = 1428000 Sale per unit = 1428000 / 680000 = 2.1 Variable expense per unit =2788000 / 680000 = 4.1 Unit CM = 4.1 – 2.1 = 2

Cassius Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (7,000 units) $210,000 Variable expenses 136,500 Contribution margin 73,500 Fixed expenses 67,200 Net operating income $6,300 The number of units that must be sold to achieve a target profit of $31,500 is closest to: 16,400 units 42,000 units 35,000 units 9,400 units 210000 / 7000 = 30 sale price per unit 136500 /7000 = 19.5 variable expense per unit Unit CM = 30 – 19.5 = 10.5 Profit = unit CM x Q – fixed expense Q = 9400

Kelsay Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.

Sales (9,000 units) $ 540,000 Variable expenses 405,000 Contribution margin 135,000 Fixed expenses 130,500 Net operating income $ 4,500 The contribution margin ratio is closest to: 67% 33% 25% 75% 540000 / 9000 = 60 sale price per unit 405000 / 9000 = 45 variable expense per unit CM = 540000 – 405000 = 135000 CM ratio = 135000 / 540000 = 0.25

Jilk Incorporated's contribution margin ratio is 60% and its fixed monthly expenses are $47,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $136,000? $7,400 $34,600 $81,600 $89,000 CM = sales x CM ratio = 136000 x 60% =81600 CM – fixed expense = 81600 – 47000 = 34600

Cobble Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $160 100% Variable expenses 48 30% Contribution margin $112 70% Fixed expenses are $499,000 per month. The company is currently selling 5,000 units per month. The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 900 units. What should be the overall effect on the company's monthly net operating income of this change? increase of $56,100 increase of $99,300 decrease of $8,900 decrease of $56,100 For 5000 units Selling price = 160 x 5000 = 800 000 Variable expense = 48 x 5000 = 240 000 CM= 560000

Fixed expense (given) = 499000 Net operating income = 61 000 For 5900 units 5000 + 900 = 5900 160 – 13 = 147 Selling price = 867300 Variable expense = 283200 Fixed expense = 499000 + 33000 = 532000 Net operating income = 52100 52100 – 61000 = - 8900

Borich Corporation produces and sells a single product. Data concerning that product appear below: Selling price per unit $150.00 Variable expense per unit $73.50 Fixed expense per month $308,295 The break-even in monthly unit sales is closest to: (Round your intermediate calculations to 2 decimal places.) 3,426 4,030 2,055 4,194 CM ratio= CM (150 – 73.50 ) / 150 = 0.51 Profit =CM ratio x sales – fixed expense 0 = 0.51 x sales – 308295 Sales = 604500 604500 / 150 = 4030

Logsdon Corporation produces and sells a single product whose contribution margin ratio is 63%. The company's monthly fixed expense is $720,720 and the company's monthly target profit is $28,000. The dollar sales to attain that target profit is closest to: $454,054 $1,188,444 $471,694 $1,144,000 Unit sales to attain target profit = Target profit + Fixed expense) / CM ratio = 28000 + 720720 ) / 63% = 1188444

Ensley Corporation has provided the following data concerning its only product: Selling price $200per unit Current sales 30,300units Break-even sales 21,816units

The margin of safety as a percentage of sales is closest to: 28% 61% 39% 72% Margin of safety = total sales – break even sales = (200 x 30300 ) – ( 200 x 21816) = 1696800 1696800 / (200 x 30300) = 0.28 Lofft Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (2,000 units) $120,000 Variable expenses 90,000 Contribution margin 30,000 Fixed expenses 16,500 Net operating income $13,500 Using the degree of operating leverage, the estimated percent increase in net operating income as the result of a 10% increase in salesvolume is closest to: (Round your intermediate calculations to 1 decimal place.) 22.22% 1.13% 4.50% 88.89% Degree of operating leverage = CM / net operating income 30 000 / 13500 = 2.22 Ingrum Corporation produces and sells two products. In the most recent month, Product R38T had sales of $20,000 and variable expenses of $7,400. Product X08S had sales of $39,000 and variable expenses of $6,170. The fixed expenses of the entire company were $41,160. The break-even point for the entire company is closest to: (Round your intermediate calculations to 2 decimal places.)

$17,84 0 $54,73 0 $41,16 0 $53,45 5 CM 1 = 12600 CM 2= 32830 CM ratio = ( 12600 + 32830 ) / ( 20000 + 39000) = 0.77 Break even point = 41160 / 0.77 = 53455...